Correlation Between Sido Muncul and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Sido Muncul and Kalbe Farma at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sido Muncul and Kalbe Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sido Muncul PT and Kalbe Farma Tbk, you can compare the effects of market volatilities on Sido Muncul and Kalbe Farma and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sido Muncul with a short position of Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sido Muncul and Kalbe Farma.
Diversification Opportunities for Sido Muncul and Kalbe Farma
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sido and Kalbe is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sido Muncul PT and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma Tbk and Sido Muncul is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sido Muncul PT are associated (or correlated) with Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of Sido Muncul i.e., Sido Muncul and Kalbe Farma go up and down completely randomly.
Pair Corralation between Sido Muncul and Kalbe Farma
Assuming the 90 days trading horizon Sido Muncul PT is expected to generate 1.06 times more return on investment than Kalbe Farma. However, Sido Muncul is 1.06 times more volatile than Kalbe Farma Tbk. It trades about -0.07 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about -0.2 per unit of risk. If you would invest 59,185 in Sido Muncul PT on September 1, 2024 and sell it today you would lose (1,685) from holding Sido Muncul PT or give up 2.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sido Muncul PT vs. Kalbe Farma Tbk
Performance |
| Timeline |
| Sido Muncul PT |
| Kalbe Farma Tbk |
Sido Muncul and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sido Muncul and Kalbe Farma
The main advantage of trading using opposite Sido Muncul and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sido Muncul position performs unexpectedly, Kalbe Farma can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kalbe Farma will offset losses from the drop in Kalbe Farma's long position.| Sido Muncul vs. Indofood Cbp Sukses | Sido Muncul vs. Mayora Indah Tbk | Sido Muncul vs. Bank Pembangunan Timur | Sido Muncul vs. Pakuwon Jati Tbk |
| Kalbe Farma vs. PT Indofood Sukses | Kalbe Farma vs. Unilever Indonesia Tbk | Kalbe Farma vs. Semen Indonesia Persero | Kalbe Farma vs. United Tractors Tbk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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